Cloud Channel ManagementPosted: January 27, 2011
Migration to the cloud is not just changing software architectures. ISVs need to rethink their over all business models and go-to-market strategies. Data and application marketplaces will become core to marketing, selling, invoicing and subscriber management for cloud solutions. This transformation will have far reaching impact on channels.
When Microsoft announced Windows Azure, Online and BPOS offerings the reseller/distributor community and hosting partners saw their reason for existing diluted overnight. With the beta launch of the Azure Application Marketplace resellers, integrators and distributors of Microsoft ISV partner solutions have been put on notice. The application marketplace will eventually be a full ecommerce service (think iTunes), through which Azure based applications can be marketed and sold in volume. Even if resellers are enabled to help with discovery by directing subscribers to buy, their margins will be dramatically cut. Resellers need to be able to provide higher value services to compensate lost license commissions… become integrators?
The enterprise end customer has outsourced their infrastructure and platform strategy to the cloud vendor. The enterprise end customer’s next concern is finding the best applications that make their cloud sourced portfolio complete and how to maximize their return on investment through configuration and optimization.
Large integrators typically bring in contractors to deliver massive projects. Smaller integrators specialize in a specific domain area or industry segment. Both have to create portfolios of applications that provide their end customers with a holistic cloud sourced solution. However, integrators are mostly limited to workflow, dashboard and reporting integration, which is still not fully optimized.
The role of distribution also needs to change in a fundamental way. A distributors role traditionally is to support their ISV partners with brand marketing, amplifying access to market through existing reseller channels and providing funding for payment terms. The crucial funding role seizes to exist, as payments become monthly subscription based and are funneled through application marketplaces. As resellers are forced to specialize the distributors ability to offer an ISV broad market access becomes limited. Distributors are finding themselves hard pressed to keep hold of a meaningful role.
The questions an ISV must think of of are:
a) How do I position my application in relation to other applications? What is my value proposition and my ‘cloud sourcing’ story?
b) How do I carve my brand niche in this era of cloud colonization?
c) Whom do I need to partner with to succeed?